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Windows Phone 7 Could Be Big Challenge for Enterprise

Microsoft launched Windows Phone 7 in a New York City event Oct. 11. One analyst thinks businesses could have a hard time adopting the devices.

When Microsoft launched Windows Phone 7 in a high-profile New York City event Oct. 11, executives demoed features designed to appeal to both consumers and businesspeople: The smartphones include not only tight Xbox and Facebook integration, but also easy access to mobile productivity applications and email.

Those words could very well prove true-with a user interface that aggregates both Web content and apps into six subject-specific "Hubs," Windows Phone 7 is designed for streamlined use. But just how useful will it prove to be in the enterprise? Considering that large businesses have traditionally represented a customer base for Microsoft's mobile products, that is no insignificant question.

One analyst believes that, although users could benefit from that unique interface, the enterprise could find itself at a loss with Windows Phone 7-especially those that already devoted resources to building applications on Microsoft's Mobile platform. "It will be hard for apps to be ported unless they are already Silverlight-compatible or built-in standard .Net mobile protocols," Jack Gold, primary analyst for J. Gold Associates, wrote in an Oct. 11 research note. "The majority of enterprise apps are not."

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However, Gold added, businesspeople could find a lot in the new platform from which to benefit. "Business users [are] the core of the previous Windows Mobile constituency, but many have defected over the past year," Gold wrote. "It is unclear whether Microsoft can win them back, or even keep the existing, albeit significantly diminished, base of enterprise users." Despite that, "the business hub on WP7 looks compelling (provided you are an Exchange/Outlook user)."

Windows Phone 7 "winners," Gold thinks, include Xbox gamers; "Facebook Aficionados," who will appreciate the social network's tight integration with the smartphones; Silverlight programmers; and users who want a consistent smartphone offering on a variety of platforms.

Microsoft plans for appealing to both business users and consumers include a massive marketing campaign, estimated at $400 million by Deutsche Bank analyst Jonathan Goldberg, and an initial launch of nine devices in November. At first, Windows Phone 7 will be available only on GSM-based networks, such as AT&T and T-Mobile; however, the smartphone platform will appear on Verizon in early 2011.

AT&T will offer three Windows Phone 7 devices at the outset: The LG Quantum ($199), which features a physical QWERTY keyboard; the HTC Surround ($199), with a slide-out speaker and a kickstand; and the Samsung Focus ($199), which AT&T claims will be the thinnest of the initial Windows Phone 7 devices.

Analysts are divided over whether Windows Phone 7 will allow Microsoft to regain market-share in the long term. Research firm Gartner, for example, predicts that Microsoft's share will drop from 4.7 percent in 2010 to 3.9 percent in 2014, following a brief uptick in 2011.

"Launches of updated operating systems-such as Apple iOS4, BlackBerry OS 6, Symbian 3 and Symbian 4, and Windows Phone 7-will help maintain strong growth in smartphones in 2H10 and 2011 and spur innovation," Roberta Cozza, an analyst with Gartner, wrote in a Sept. 10 research note. "However, we believe that market-share in the OS space will consolidate around a few key OS providers that have the most support from CSPs and developers and strong brand awareness with consumer and enterprise customers."

However, IDC predicts that Windows Phone's market-share will grow from 6.8 percent to 9.8 percent of the smartphone market between 2010 and 2014.

"IDC believes the market will comfortably support up to five OS players over the next five years," Kevin Restivo, an analyst with IDC's Worldwide Quarterly Mobile Phone Tracker, wrote in a Sept. 7 statement. "Shorter replacement cycles and an ample feature phone to smartphone upgrade opportunity means the smartphone OS market will remain fragmented but healthy for the foreseeable future." Within that context, no smartphone platform will dominate.

Business users will constitute a significant portion of that market, for good or ill. In any case, Microsoft seems cognizant of how all details, no matter how small, can potentially affect WP7's performance. Joe Belfiore, Microsoft's corporate vice president and director of Windows Phone Program Management, announced during the Oct. 11 launch event, for example, that cut-and-paste-a user-interface option previously announced as being unavailable during Windows Phone 7's initial release-would make an appearance on devices in early 2011. According to another analyst, features such as cut-and-paste could prove vital in Windows Phone 7's play for the enterprise.

"Pretty much in the next round they have to deliver cut-and-paste, multi-tasking and allow developers to get at the database inside the devices now," Al Hilwa, an analyst with IDC, wrote in an Oct. 11 research note. "This will be important as they fold the enterprise strategy back into [Windows Phone 7], which was clearly where Windows Mobile was successful."